Govt spends Rs 4,500 cr on closed PSUs

NEW DELHI, JANUARY 18: Ever wondered what happens to workers in factories which close down? Well, if these units are in the public sector,...

NEW DELHI, JANUARY 18: Ever wondered what happens to workers in factories which close down? Well, if these units are in the public sector, the workers will continue to get paid. Over the past 5 years, the central government has paid a little over Rs 4,500 crore to PSUs where the majority of units are lying closed. All the budgetary support is essentially to pay the workers their monthly salaries.

And with the government yet to take a decision on what to do with these units, chances are that when Finance Minister Yashwant Sinha finalises his forthcoming budget, he8217;ll add another thousand crore or so on this account, as expenses for the year.

According to the available figures, in the current financial year 1999-2000, the Government spent Rs 822.91 crore in providing non-plan support to nine sick public sector units. The final amount may even be higher because this figure is of the Budget estimates and in many cases supplementary demands have already been raised.

The amount was even higher in previousyears. For instance, in 1995-96, the Government spent Rs 675.9 crore towards payment of salaries and wages of 11 sick companies; in 96-97 Rs 930.42 crore; 97-98 Rs 1102.63 crore; 98-99 Rs 1060.92 crore.

The companies in question are; National Textiles Corporation NTC on which the Government spent Rs 400 crore in the current financial year. NTC has 119 mills, out of which 24 mills are working, 34 are closed for more than five years and some limited activities are going on in rest of the 61 mills.

National Jute Manufacturers Corporation, on which Rs 50 crore was spent during the year, has six units and there are hardly any commercial activities going on. The Corporation was referred to BIFR in August 1992.

Elgin Mills Ltd, on which Rs 9.60 crore was spent during the year, has two units and both of them are lying closed since December 1995. British India Corporation Ltd on which Rs 15.40 crore was spent, has two mills and was referred to BIFR in 1993. The BIFR recommended winding up of the company inOctober 1994.

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Later in 1997, the AAIFR dismissed the appeal of the company against BIFR judgement. Some limited activities are going on in both the mills. During 1997-98, the value of production was Rs 9.32 crore and the cash loss incurred was Rs 32.24 crore.

Cawnpore Textile Mills, on which Rs 4.19 crore was spent, has one cotton textile unit. In January, 1995 BIFR recommended winding up of the company. However, in May 1997, AAIFR dismissed the appeal preferred by the company against BIFR. There is total stoppage of mill operations since May, 1997.

Indian Drugs and Pharmaceuticals Ltd IDPL, on which Rs 33.72 crore was spent, is the largest bulk drugs manufacturer in the country and has been referred to BIFR. All its units are closed since October, 1996.

Hindustan Fertilisers Corporation Ltd, on which Rs 107.25 crore was spent, has four units, out of which three units are lying closed. One of them, Haldia Fertiliser Plant was mechanically completed in 1979, but has not been commissioned so far. So,practically the entire non-plan support is for meeting the salaries and wages.